SECP Proposes Strict Timelines for Insurance Claims

The Securities and Exchange Commission of Pakistan (SECP) has proposed mandatory timelines for insurance companies to process and settle claims, aiming to reduce delays and strengthen consumer protection.

 

Under the draft Market Conduct Rules 2026, life insurance claims would have to be decided within 20 days after receiving all required documents. Motor insurance claims would need to be decided within five days of the survey report, while other non-life claims would have to be processed within seven days.

 

Once a claim is approved, insurers would be required to make the payment within seven days.

 

The proposed rules also introduce timelines for health insurance. In-patient claims would need to be settled within 20 days, while hospital discharge authorisation would have to be provided within three hours. Patients could not be held in hospitals because of delays by insurers.

 

The SECP also proposes limiting insurers to requesting only documents relevant to a claim and requiring companies to publish data on settled, rejected and pending claims.

 

For policy issuance, new applications would have to be processed within seven days, while life insurance documents could take a maximum of 20 days. Policies sold digitally would need to be issued within three days.

 

Insurers violating the proposed rules could face fines of up to Rs1 million, with an additional penalty of up to Rs10,000 per day for continued violations.

 

The SECP has invited public and stakeholder feedback within 30 days, after which the draft rules will be submitted to the SECP Policy Board for approval.